Nuvoco Vistas Corporation Ltd, the cement division of Nirma Ltd, is ramping up its infrastructure in Gujarat with a renewed capital expenditure plan totalling ₹1,500 crore.
The company is setting up a new two million tonnes per annum (MTPA) cement grinding unit in Kutch, aimed at reviving and expanding the production footprint of recently acquired Vadraj Cement.The investment marks a ₹300 crore increase from Nuvoco’s initial ₹1,200 crore plan to restore Vadraj’s production units in Kutch and Surat. The company intends to commission the new Kutch grinding facility, alongside Vadraj’s existing assets, by December 2027.The Kutch unit is a strategic move to localise Nuvoco’s cement supply for the Gujarat market, which currently relies on production from Rajasthan. According to the company’s top management, this expansion will not only ease supply bottlenecks in Gujarat and north Maharashtra but will also release Rajasthan’s capacities to serve northern markets more efficiently.
Nuvoco’s revived Vadraj assets include a 3.5 MTPA clinker unit in Kutch, a 6 MTPA grinding unit in Surat, vast limestone reserves, and a captive jetty. Once operational, these additions will raise Nuvoco’s overall cement production capacity to approximately 31 MTPA.The ₹1,500 crore project will be funded in three phases—₹600 crore each in 2025 and 2026, followed by ₹300 crore in 2027. To ensure capital discipline, the company has capped its existing operations’ annual capex at ₹100–150 crore, allowing internal accruals to fund the bulk of the Vadraj expansion.On the financing front, Nuvoco will make an upfront payment of ₹1,800 crore for acquiring Vadraj, of which ₹600 crore will be secured as long-term debt. The remaining ₹1,200 crore will be raised through Compulsory Convertible Preference Shares (CCPS) and Compulsory Convertible Debentures (CCDs).
These instruments offer long-term maturity with deferred interest costs, ensuring the company’s balance sheet remains robust and relatively unburdened.
A bridge loan of ₹1,200 crore will temporarily support this structure until formal financing is secured. The company has already identified investors willing to contribute via these instruments, with the expectation of repayment at maturity.
In recent years, Nuvoco has significantly reduced its net debt—from ₹6,730 crore in FY21 to ₹3,640 crore in FY25. With stable operations and focused deleveraging, the company remains confident operating with a net debt in the ₹3,500–4,000 crore range.
The expansion in Gujarat strengthens Nuvoco’s ability to meet regional demand while aligning with broader goals of decentralised, sustainable infrastructure growth. Efficient logistics, proximity to raw material sources, and port-based operations in Kutch underscore the company’s commitment to reducing its carbon footprint and operational costs.As India’s infrastructure sector continues to surge, Nuvoco’s calibrated investment into long-term assets positions it to serve a growing construction market while promoting regional development in a strategically important industrial belt.
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Nuvoco boosts cement capacity in Kutch
